Accounting · Accounting Cycle
The primary role of Adjusting and Closing Entries in the accounting cycle is:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To reverse all previous entries that resulted in an Error of Principle.
- 2To allocate revenues and expenses to the correct accounting period and prepare the books for the next cycle.✓
- 3To record only cash transactions that were missed during the financial year.
- 4To transfer the balance of the Suspense Account to the Balance Sheet.
Correct answer
To allocate revenues and expenses to the correct accounting period and prepare the books for the next cycle.
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